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Litigation Against the SEC’s Regulation Best Interest? Not Surprised

Contributor Scott Simon details two recent lawsuits filed against the SEC related to regulation best interest.

I really thought that last month’s column would be my final one--at least for now--concerning Regulation Best Interest, or Reg BI, which was issued by the U.S. Securities and Exchange Commission on June 5.

That column concluded by calling for the demise, sooner rather than later, of Reg BI: “[I]n my view, some body with the appropriate standing should sue the SEC forthwith in order to jettison Reg BI for the great mistake it is. In 2007, the Merrill Lynch Rule was slapped down by a federal appeals court in Financial Planning Association v. SEC. The Court held that the SEC overstepped its bounds by attempting to negate a long-standing federal statute--the [Investment Advisers Act of 1940]--through its regulatory rule-making. My belief is that the SEC has committed even greater transgressions in the case of Reg BI.”

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